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  • Writer's pictureStephan Liozu, PhD.

Subscription Fatigue

In the past few years the subscription economy has grown tremendously. Subscriptions are popping up right and left to the point that it is difficult to keep track. These days you can't read an online blog without being a subscriber. You need to subscribe to several streaming networks to watch your favorite shows. Even car manufacturers have jumped on the bandwagon, considering charging for optional features using a subscription model. It all has become too much.

Recently, Robbie Baxter (Robbie Kellman Baxter) wrote a great post on LinkedIn discussing subscription fatigue (Will Subscriptions Work Forever? The Future of a Popular Pricing Tactic). In it, she states that many people are starting to complain of fatigue as more households subscribe to new services and have a tough time keeping up with them. Robbie points out that “they might feel that the subscription pricing isn't justified by the offer (a Product/Market Fit problem). They feel bad about fact that they are not taking advantage of all the terrific value their subscriptions provide--too many unread New Yorkers or uneaten Blue Apron kits (Subscription Guilt). Or they are just angry that it is so darn hard to find the cancel button.”

I must admit I have experienced the concept of subscription fatigue myself. I mean, how many services can one person subscribe to? I already subscribe to Netflix, Hulu and Peacock and am regularly bombarded with additional content options from Paramount, Discovery, and more. The plethora of options has a downside: According to the 13th edition of Deloitte’s annual Digital Media Trends survey, nearly half (47%) of U.S. consumers say they are frustrated by the growing number of subscriptions and services required to watch what they want. An even bigger pet peeve: 57% said they’re frustrated when content vanishes because rights to their favorite TV shows or movies have expired (Streaming Players Face Growing Consumer 'Subscription Fatigue': Survey - Variety).

So, we are starting to see some cracks in the subscription economy. The subscription experts are starting to notice and write about it, encouraging more businesses to consider transitioning to a full or hybrid consumption model. Here's what they are saying:

  1. Top Concerns with subscriptions: (What’s Happening to Subscription Services? | Jabil): “Despite the increase in subscription service adoption for household staples, we did notice a decrease in satisfaction with these services. In last year’s survey, a quarter (24%) affirmed that they had no complaints about subscription services for household staples. This year, the percentage of fully satisfied customers have fallen to just 10% of users. This means subscription services for household staples have seen a 58% drop in fully satisfied customers year-over-year. Thirty-four percent say their biggest dislike about subscription services is that they are difficult to cancel, while 33% say their biggest dislike about subscription services is that they are more expensive”.

  2. Customers are overwhelmed: According to a Deloitte survey, the average American subscribed to twelve paid media and entertainment services pre-pandemic. Among those age 25 to 40, who averaged 17 subscriptions, 40% reported feeling overwhelmed by the number of their subscriptions and intend to reduce them (Digital media trends survey | Deloitte Insights).

  3. More customers are hitting the cancel button: Research from Emarsys shows that only one in fifty UK shoppers have kept their subscription services for more than a year. This means that 98 percent cancel their services within the first twelve months of subscribing. The average consumer in the United Kingdom even cancels their subscriptions in less than half a year – an average of 5.3 months (Most Brits cancel product subscription in first year (

  4. Auto subscriptions are not scaling well: Subscriptions have been a mixed bag for the auto industry. Ford walked away from its service last fall following low demand. Cadillac shut down its service Book in 2018, only to resurrect it several months later with fewer options. Other automakers have had some success. BMW, Porsche, Audi, Volvo, Nissan, and Jaguar are still offering some variation of a subscription service. But in general, the sales numbers for car subscriptions are not what the industry expected.

So, what can we conclude from all of this?

  • First, subscriptions should not be the de-facto business model just because others have done so and are successful. When there are twelve subscription offers in one space, adding one more is not ideal.

  • Second, some sectors are highly saturated and commoditized. They are prime for disruption with a new business model.

  • Third, this trend of subscription fatigue is now also detected in the B2B SaaS world especially during the COVID years when companies paid for subscription and were not able to reap the benefits of having them.

The result is the rapid emergence and growth of two phenomena:

  1. The usage-based business model is booming: 45% of SaaS companies have adopted usage-based pricing in 2021 and it is estimated to reach 56% in 2023 (2021 State of Usage-Based Pricing - OpenView ( Consumers and B2B customers want to pay for what they use or consume. It makes good economic sense. Some subscription providers have already included a usage component in their offers. Usage-based pricing models are much more aligned to the consumer way of buying but also to the B2B customers’ value metric. As more subscription providers raise prices like Netflix and Amazon prime recently did, they will demand a pay-per-use model, or they will disconnect.

  2. The Platform-as-a-service model (PaaS) is growing at twice the rate of SaaS: Recognizing the fragmentation of the SaaS space and some of the pain points reported by customers, the large cloud offerings identified an opportunity to disrupt the SaaS space by offering PaaS solutions. In the 2020s, the headline disruption for many software companies will be the growth of PaaS. Between 2016 and 2018, PaaS revenues grew at twice the rate of SaaS—44 percent a year versus 26 percent, respectively (McKinsey, 2020, The next software disruption: How vendors must adapt to a new era).

Subscriptions are here to stay and will likely keep growing in number, but usage-based pricing models are going to be the next big thing. Are you ready for the usage economy?

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